Customer Contract Management (Material)
The objective of writing this blog post is to explain the process of Customer Contract Management for Material and Services.
In this blog I have explained detailed process from creating ‘Quote for contract for material’ to ‘Customer Invoice’
I am also going to post one more blog that is on Customer Contract Management for Services.
The Contracts view allows you to create and manage contracts related to materials and services.
Contracts are integrated seamlessly with sales order, service request and service confirmation processing, allowing you to fulfill and confirm the sale of materials and services carried out for a contract. You can maintain invoice schedules for contract items sold for a fixed price, or set price agreements for items sold on a time and material basis.
SAP business ByDesign provides a feature of creating contract from quote for contract. Contract can be created to hold a long term relationship with the customers. Contracts can be created with customers for selected products, for a particular period and with a negotiated price. when the customer requests offer for an product you can create quote for contract and then create contract from there.
Quote for contract can be created either in 2 different ways. you can create manually in the system or you can enter the details through template. You can create quote for contract by entering them in a predefined Microsoft Excel template and uploading them to the SAP Business ByDesign system or you can create manually in the ‘New Business’ work center.
Figure 1: Process Flow of Customer Contract for Material
Enable scoping question “Do you want to work with materials in contracts?” in business configuration under step 4 questions Sales -> Selling Products and Services -> Customer Contracts.
Figure 2: Scoping
Creating quote for contract:
New Business work center> New quote for contract>
Here you can create new quote for contract and enter all the mandatory information such as customer details, sales unit, product, prices and discounts.
Figure 3: Creation of Quote for Contract
On the items tab, you can enter negotiated prices and discounts. Once you are happy with the price agreement, you can submit it, and a quote for contract is created. Now you can send the quote for contract to the customer with the product details.
As soon as the quote for contract is submitted, it is sent to the customer. Based on customers decision follow up documents can be created.
Creating contract from quote for contract:
Figure 4:Creating contract from Quote for Contract
All the details are flowed from ‘Quote for contract’ to ‘Contract’. Once you are satisfied with the details you can release it.
If a formal contract renewal process is relevant to your business, you can enter a renewal rule In the Renewal Agreement section of the Renewal and Cancellation tab. This field is for information purposes only and may be left blank. Renewal settings are valid for all items in the contract.
Figure 5:Renewal Rule
If you want to use formal cancellation process, enter a cancellation rule in the cancellation Agreement section. This field is for information purposes only and may be left blank. You can describe this rule further by entering a note in Details, and by setting a minimum contract validity period.
Figure 6:If you want Automatic Renewal of Contract enable ‘Renewed Automatically’ check box
SAP Business ByDesign gives an option to check the ‘Renewed Automatically’ check box, So that contract is renewed automatically. If the renewed automatically check box is not visible in the screen, then from the adaption mode select the field, then save and publish.
Once the contract is submitted, status is changed from ‘In preparation’ to ‘In process’. Follow up documents can be created.
Creating sales order from Contract:
Figure 7:Creating sales order from Contract
In the sales order items tab select the appropriate contract, List price is carried from price agreement which is maintained in the contract.
Figure 8:Select appropriate Contract ID for the product
Once the sales order is submitted, customer demand has to be released, then product will be delivered to the customer.
Creation of Outbound Delivery:
Figure 9:Creating Outbound Delivery
Creation of Customer Invoice:
Customer contract will help company to maintain good relationship with the customers by giving negotiated prices for the product.
I have tried to explain the topic Customer Contract Management for Materials in simple terms by showing the exact steps so that you can avoid errors in the SAP Business ByDesign system while trying this process. I hope this blog will be helpful.
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Great work. Keep posting.
Thank you Deepali Shenaoy
Awesome blog Samitha Kotian
thank you for your effort
Thank you John Meadows
Thank you for the helpful blog Samitha Kotian
Thank you Harsha Salian